GENERAL MEETING DRAFT - Bankier.pl

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>> Consolidated Financial Statements
Part E – Information on risks and related risk management policies
In order to strengthen the capacity of independent steering, coordination and control of Group risks, to
improve the efficiency and the flexibility on the risk decisional process and to address the interaction
between the relevant risk stakeholders, dedicated Risk Committees have been set-up:
� the "Group Risk Committee" being responsible for the Group strategic risk decisions;
� the "Group Credit and Cross-Border Risk Committee”, responsible for controlling and monitoring
credit and cross-border risks, including approval of risk strategies, policies, methodologies and
limits as well as regular reporting;
� the "Group Transactional Credit Committee", in charge of evaluating the single counterparts /
transactions impacting the overall portfolio risk profile;
� the “Group Special Credit Committee”, in charge of evaluating restructuring or workout files and
monitoring the overall restructuring and workout portfolio development.
2.2 Factors that generate Credit Risk
In the course of its credit business activities the Group is exposed to the risk that its loans may, due to the
deterioration of the debtor’s financial condition, not be repaid at maturity, and thus resulting in a partial or
full write-off. This risk is always inherent in traditional lending operations regardless of the form of the
credit facility (whether cash or credit commitments, secured or unsecured, etc).
The main reasons for default lie in the borrower’s lacking the autonomous ability to service and repay the
debt (due to a lack of liquidity, insolvency, etc.), as well as the occurrence of events that are unrelated to
the debtor’s operating and financial condition, such as Country risk or the impact of operational risk. Other
banking operations, in addition to traditional lending and deposit activities, can expose the Group to other
credit risks. For example, 'non-traditional' credit risk may arise from:
� entering into derivative contracts;
� purchasing and selling securities, futures, currencies or commodities;
� holding third-party securities.
The counterparties in these transactions or issuers of securities held by Group Legal Entities could default
as a result of insolvency, political and economic events, lack of liquidity, operating problems or other
reasons. Defaults in relation to a large number of transactions, or one or more large transactions, could
have a material adverse impact on the Group’s operations, financial condition and operating results.
The Group monitors and manages the specific risk of each counterparty and the overall risk of loan
portfolios through procedures, structures and rules, that steer, govern and standardize the assessment
and management of credit risk, in line with the Group principles and best practice, and which are capable
of extending their effectiveness to all phases of the economic cycle.
With particular reference to the current scenario, characterized by worsening of some economic and
financial fundamentals in an already problematic phase of the cycle, the Group, maintaining existing
rationales and procedures, has strengthened the control and management of credit risk through ongoing
and rigorous respect of the rules for granting loans and by enhancing monitoring procedures. In addition,
the existing relevant structures have been strengthened, and new ones have been created specifically
dedicated to more sensitive areas, for purposes of timely detection of any critical signs.